Sentiment is hard to measure

Over the last 4 months, we have seen a significant amount of positive news articles, product development, positive government regulation and even Wall Street adoption, but that has had little to no bearing on the price. We look at a few articles from non-crypto companies and their impact. 

NYSE owners launch Bakkt Global crypto platform and ecosystem

In early August, ICE (Intercontinental Exchange) the parent company of the NYSE announced plans to launch a new company (Bakkt) which makes it possible for consumers and institutions to buy, sell, store and spend digital assets on a seamless global network.

ICE is known for operations in clearinghouses, data and listing services. Microsoft, Starbucks and BCG are helping execute this venture. ICE owns 23 regulated exchanges and marketplaces in Canada, Singapore, Europe and the US. ICE has a US$44bn market cap and 5,000 staff.

State Street move into crypto Custody

State Street, the worlds second largest custody bank plans for digital asset custody in 2019. The Boston-based bank which has US$33tr under management said there was a growing demand from its largest clients to invest in digital currencies.  

State Street commonly holds assets on behalf of large institutions like wealth funds, pension schemes, hedge funds and endowments

Goldman Sachs in crypto

Wall Street Juggernaut Goldman Sach has been rumoured to be launching a crypto trading desk as well as a digital asset custody service. Goldman operates a multinational investment banking business. The official release of either project is yet to be confirmed by GS executives. However, when a recent article about Goldman cancelling plans for the trading desk was circulated late last week (helping crash the Bitcoin price $900) the CFO released an official statement saying, the news was not true.

CBOE VanEck Solid X Bitcoin ETF

There have been many ETF proposals, most of which (excluding the Winklevoss ETF) have been non-physical products, meaning they will not hold the actual underlying coin. CBOE's proposal is physical, it will but and store Bitcoin based on the FUM and demand. The SEC has until the end of Feb/start of March 2019 to make a final decision about this ETF product.

We've written about this multiple times because it stands the best chance of complying to the rules set out by the SEC. It has covered all of the major arguments of the previously unsuccessful attempts and even insures the investors.

Heston Peirce dissent within the SEC

Heston Peirce is a sitting SEC commissioner, after the rejection of the Winklevoss ETF (3 votes to 1) she wrote a public letter of Dissent, claiming it is not within the boundary of the SEC to speculate on whether Bitcoin is a good or bad investment product. Heston's argument with the commission states; the Commission has decided the Bitcoin Spot Market is not adequately protective of manipulation, Heston claims that regulated exchanges (where this product will be launched) have satisfied enough of the criteria based in Section 6(b)(5) and that the nature of the underlying market is not something the SEC should be basing their decision on. 

SEC announces Bitcoin and Ethereum aren't Securities

On August 25th, William Hinman, the Director of Corporate Finance for the SEC, said (in short): he does not find that Bitcoin and Ethereum are Securities. A monumental win for the crypto community, institutions and US investors. Future crypto products now have a benchmark set on how the SEC will evaluate digital assets and ICO's moving forward. 

Winklevoss Licensed Stablecoin (Gemini Dollar)

Gemini Dollar may seem like just another Stablecoin, but its so much more:

  1. Ethereum based

  2. FDIC deposit protected and insured

  3. Independently accounted and audited

  4. New York Department of Financial Services (NYDFS) regulated

This coin allows for US-based institutions to transfer in and out of digital assets back to a USD amount while staying in crypto, where Tether was not a viable option. Bringing liquidity and additional capital into the market.

Magnet review

These examples have dominated the news feeds from CNBC through to Forbes, Fortune, Bloomberg, FT and naturally all of the Crypto publications. Yet, the sentiment is still negative and the market continues to trend down. In crypto (most other markets), it's notoriously difficult to pick tops and bottoms, however, our seven examples are just a slew of positive developments coming into the crypto space that is yet to be priced in. Just one catalyst event needs to occur to change negative sentiment. 

We expect to see a completely different environment to 2017 in the next cycle, investors are more knowledgeable, information is widely available, trading vehicles are set up, user-experience is improving and these are all on the investment side. With value creation, you will see a drive in price, but more important than another way to put money into crypto is, the number of people using the asset for the intended purpose and not just in the hope it will increase in value. Price brings awareness, Magnet Capital invests in adoption.

Egor Sidelska